DJ FAO Food Price Index Rose in January
By David Hodari
LONDON–World food prices rose in January, climbing across most categories, the Food and Agriculture Organization of the United Nations said Thursday.
The FAO Food Price Index was up 1.8% from its December level and some 2.2% below the level from the same month last year, the organization said.
Dairy prices rose 7.2%, while meat prices were roughly unchanged from their December price. Vegetable oils rose 4.3% on month after a protracted fall.
Cereal prices ticked up on month, and were 7.3% on year. Prices of most cereals, apart from rice, kept prices supported, with adverse weather conditions in South America a factor.
Sugar prices rose 2.4% on month, rallying with rising oil prices and a firmer Brazilian real.

WHEAT
General Comments Winter Wheat markets were lower yesterday despite strong weekly export sales as the US said that there would not be a meeting between Trump and the Chinese president before the tariff increase deadline. It was another old report and did not mean that much to the trade. Al eyes are on USDA tomorrow as they finally release the important January and February reports. Export demand so far this year has been disappointing and USDA might cut estimates on Friday. The Wheat Seedings Report could show less planted area than expected due to wet conditions in the Great Plains and Midwest at planting time for Winter Wheat. Traders were also keeping an eye on the weather as extreme and possibly record cold invaded the US Midwest last week. The SRW crop was at risk, especially in areas with little or no snow cover. Temperatures have moderated, but it could take a while for the damage to show as it is still Winter and the crop is dormant. World prices have been stable to firm over the last few weeks, and the US price has held or improved.
Overnight News: The southern Great Plains should get some mixed precipitation this week and a dry weekend. Temperatures should be below normal. Northern areas should see frequent chances for precipitation this week and a dry weekend. Temperatures should be below normal. The Canadian Prairies should see mostly dry conditions. Temperatures should be below normal.
Chart Analysis: Trends in Chicago are mixed to down with objectives of 501 and 489 March. Support is at 511, 509, and 508 March, with resistance at 521, 524, and 529 March. Trends in Kansas City are mixed to down with objectives of 485, 477, and 462 March. Support is at 492, 488, and 485 March, with resistance at 507, 513, and 518 March. Trends in Minneapolis are mixed to down with objectives of 561, 549, and 534 March. Support is at 561, 557, and 553 March, and resistance is at 569, 573, and 576 March.

RICE
General Comments: Rice was lower again yesterday in preparation for the USDA reports today. Trade action for the last week has been slow, and the buying has not been strong enough to propel futures to new highs for the move. Producer selling is still hard to find. Demand from the mills is said to be quiet, but export demand should be solid as US prices are competitive into Latin America and the Caribbean Basin. Basis levels remain generally firm in Arkansas, but are weak in Texas. The Arkansas market needs a little Rice and is not getting much offer from the producers. Basis levels have shown some weakness near the Gulf coast due to light demand.
Overnight News: The Delta should get chances for precipitation off and on all week. Temperatures should be mostly above normal.
Chart Analysis: Trends are mixed. Support is at 1042, 1034, and 1031 March, with resistance at 1059, 1067, and 1076 March.

CORN AND OATS
General Comments: Corn was a little lower yesterday on some positioning before the USDA reports today and as the market learned that the presidents of the US and China would not meet before the tariff deadline. The trade expects a bullish report. The Corn data for last year is expected to show reduced production. Demand could be a little weaker as well, especially with the current weakness in the ethanol market. It remains dry and hot in central and northern Brazil, but the weather patterns are starting to change and feature at least some showers in important Winter Corn growing areas. The Soybeans harvest is expanding in Mato Grosso and Parana, and farmers will be ready to plant the winter Corn once the Soybeans are out. The harvest pace and planting pace have been ahead of normal there and also in Parana. Trends are currently sideways on the daily charts and sideways on the weekly charts.
Overnight News: Ethanol production was lower at 967,000 barrels per day, down from 1.031 million the previous week. Stocks rose to 23.9 million barrels. Year-to-date estimated Corn use for ethanol rose to 2.214 billion bushels, which is down 2.5% from last year and below the pace needed to hit USDA’s target by 32 million bushels.
Chart Analysis: Trends in Corn are mixed. Support is at 376, 375, and 371 March, and resistance is at 381, 384, and 387 March. Trends in Oats are mixed. Support is at 284, 280, and 278 March, and resistance is at 289, 294, and 296 March.

SOYBEANS AND PRODUCTS
General Comments: Soybeans and products were lower yesterday on news that the US and Chinese presidents would not meet before the deadline for increasing tariffs. Traders were getting ready for the USDA reports today. Traders look for reduced US production and also reduced US demand. Private Brazil production estimates range from about 110 million tons to about 115 million tons. The hot and dry weather in Brazil is still causing production estimates there to drop, but the market has not really reacted much to that news, either, as conditions have started to improve with the introduction of some showers in some of the drier areas. US Soybean Meal supplies should be increasing as crushers look to produce Soybean Oil due to higher prices in that product, and Soybean Meal trends are starting to turn down. Basis has been weaker, and there are reports of increasing offers from Argentina. There are plenty of Soybeans to sell from the US and South America.
Overnight News:
Chart Analysis: Trends in Soybeans are mixed to down with objectives of 891 and 875 March. Support is at 909, 906, and 900 March, and resistance is at 918, 922, and 924 March. Trends in Soybean Meal are down with objectives of 305.00 and 299.00 March. Support is at 305.00, 304.00, and 301.00 March, and resistance is at 309.00, 312.00, and 314.00 March. Trends in Soybean Oil are up with objectives of 3110 and 3210 March. Support is at 3050, 3030, and 3010 March, with resistance at 3100, 3160, and 3190 March.

CANOLA AND PALM OIL
General Comments: Canola was a little lower in front of the USDA reports. Speculators and domestic processors were the best buyers, and speculators and producers were the best sellers. Soybean Oil was much higher and supported Canola. Wire reports indicate that the overall export demand is down this year. Chart trends are trying to turn up again. Palm Oil was higher as prices caught up to the rallies this week in Soybean Oil.
Overnight News:
Chart Analysis: Trends in Canola are mixed. Support is at 480.00, 474.00, and 471.00 March, with resistance at 486.00, 489.00, and 490.00 March. Trends in Palm Oil are mixed to up with objectives of 2340 April. Support is at 2300, 2270, and 2250 April, with resistance at 2340, 2350, and 2380 April.

Midwest Weather Forecast: Chances for big precipitation off and on all week, then a mostly dry weekend. Temperatures should be near to above normal this week and mostly below normal this weekend.

US Gulf Cash Basis
Corn HRW SRW Soybeans Soybean Meal Soybean Oil
February 61 March 158 March 86 March 301 March Price
March 60 March 90 March 30 March
April 51 May 80 May 21 May
All basis levels are positive unless noted as negative

Brazil Premiums Soybeans Soybean Meal Soybean Oil Corn
Paraguay Paraguay Paraguay Santos
February 52 March
March 55 March -13 March
April 52 May -17 May

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